Posted
by
michael
on Friday March 19, 2004 @01:35PM
from the come-here-sweetie-and-give-daddy-a-kiss dept.

meriksen writes "This article on the CNN website suggests that Microsoft is looking to acquire AOL. What are the chances and do /. readers think this will ever happen?" The NY Post story is slightly more informative.

Besides having to sell over Netscape (I think I have $10 here...) wouldn't there be a problem with Microsoft's existing deals with Comcast?

What problem would that be? Nothing really prevents Comcast and Time Warner Cable from merging if that's what they wanted to do, since there's no place in which the two cable companies compete with each other.

I suspect the biggest benefit for Microsoft buying AOL will be to compete against Google for search market share. Currently the market is split between Google, MSN and Yahoo. If MSN take AOL's share from Google they might be able to claim a majority of the search market when they launch their upcoming search engine.

However, there's a chance this will be another case of the European Union blocking a merger that American anti-trust law OKs?

No No, Mozilla will be alive and well, first off Mozilla was an open source license. Second the Mozilla Foundation was created and AOL gave them a nice $2M gift to get started. They are are a separate legal entity. Mozilla is now independent of AOL. As for the future of xmms and winamp well who knows. However I think (IANAL) the "look" of winamp would be a trademark and not a copyright. If a trademark is not defended then you lose the trademark. Since xmms has been out for a few years now no worries.

Microsoft eyeing AOL? Sounds like they would make strange bedpartners for a few reasons I can think of; The Microsoft Butterfly seems to market directly to the AOL mentality, which many of you know to be among those who use "The Internet" to find out things, download music and chat ("The Internet" being the AOL homepage!)...

While I may think AOL is too big for Microsoft to acquire and manage properly, that's just my opinion and it's likely incorrect, as Bill Gates is an iron leader of a huge corporate empire, with the Midas touch, and elite backing that gives anyone with that much money a guarantee of acquiring even more. What is more interesting than all the market'spaek, is that Time/Warner wants to dump AOL... and for this I am not surprised, while the article is more along the lines of Microsoft wanting to get their greedy hands on AOL, any objective observation would lead one to ponder if AOL is having trouble, or projected trouble? Whenever I have ever sold a car, it wasn't because I wanted some schmo from the public to get my super amazing car and benefit from it; it was because the car was old and I didn't want it anymore.:-)

Even considering Microsoft's relationship with the current justice department, I seriously doubt this merger would be approved. What would happen when the new version of Windows would only set up an internet connection through an approved MS/AOL online service?

What would happen when the new version of Windows would only set up an internet connection through an approved MS/AOL online service?

A mass exodus to Apple or Linux. That's what I'd do for my organization, and I have the power to make it happen. I wonder if Microsoft knows how close some of us are to switching like that? Their credibility is hanging by a thread, and the only thing keeping us from dumping them is how many products of theirs we use and the costs associated with retraining. There are those of us that can make the case to managers that will listen. Once the dollars add up, people are quick to change.

We keep hearing, almost daily, that such and such company is moving to Apple, or that some country's government across the big pond is moving to Linux. It almost seems like the house of cards is beginning to fall. Albeit, slowly, but here and there, it's starting.

25Million paying customers aren't what they used to be. The rest of this post is based on the old addage, know thy enemy well.

Several things happened to AOL over the last 10 years. Ten years ago, AOL first hit critical mass of 1 million subscribers.

Eight years ago, AOL purchased WebCrawler and a few other companies. They launched AOL Europe opening internet service to the German public. And AOL Europe didn't make money, but cost a bundle to set up.

MSN is a money loser as well. But it's important to undertand that Microsoft doesn't "get paid" through direct revenues so much as through the valuation of their stock. And the price of their stock hinges on the perception that they control everything that touches the areas of computing and the internet--and that they will extend that control in the future by leveraging the monopoly. Even today their stock valuation is all out of proportion to their revenues and share price is how the company principals are paid. Everyone who buys MSFT at this point is buying the idea of an unstoppable monopoly that will roll up any competitor or partner in the long run. So it doesn't matter if AOL is a longterm money loser, they are the visible competition and the competition has to be seen being absorbed by MS, or ruined, in order for the MS mythology to sustain itself. Like a shark, MSFT has to continually swim, kill and eat or it will die.

I think the real question is: Why would Microsoft, who has a failing ISP, want to buy AOL, who is a failing ISP? AOL are in competition with Microsoft. It seems like their business strategy could incorporate buying all the competition and dissolving them. While ignorant AOL users don't realize it, Microsoft is offering a better service (e.g. the REAL Internet). In short, I don't think Microsoft can learn anything from AOL.

Despite the fact that AOL/Netscape has fired most (if not all?) of the Mozilla developers, I'm sure (assuming Netscape was part of the aquisition) Microsoft would jump and the slap-in-the-face it could give the OSS community at large.

And AOL owns Nullsoft. Assuming that is part of the Aquisition, it would be another interesting sping.

I'm sure the list could go on if I got bored. But it's all based on assumptions about what Microsoft would get with the purchase.

(1)Why would Microsoft, who has a failing ISP, want to buy AOL, who is a failing ISP? (2)AOL are in competition with Microsoft.

1) for millions AOL is the internet. and with millions of new subscibers, they direct HUGE traffic towards their sites. remember the smart tags in office. think AOL keywords. bingo.

2) and, you buy them. ain't like microsoft has never done this before.

remember, they are no longer, if they ever were, an innovation company. they have a US market share at which the only direction is down. their foreign share is tenuous at best with the rise of linux and gov't's, etc., becoming increasingly wary of microsoft. the biggest part fo their angst regarding linux is they can't buy it. they can't stop it. and they're not happy. aol just solidifes their hold on US market.

Don't forget AIM and ICQ. With this deal MS would control all 3 client bases. The move to interoperability could be nice, but at the same time yahoo and whoever else are left out in the cold, and this provides a HUGE userbase for MS in the instant messageing arena.

I think before this would ever happen, the US DOJ would have to get involved. Think about it, they would control the two most popular browsers, MSIE and Netscape/Mozilla; they would control the two most popular chat clients, MS Messenger and AOL IM; and they would control two popular music/video clients, Windows Media Player and Winamp.

Regardless of what has happened in the past with the DOJ and anti-trust cases, there would be no way that these three aspects of any merger would be overlooked. IANAL, but I

Actually, I could see Microsoft buying out AOL and it being a sensible business move.

The thing is, they wouldn't be running both AOL and MSN simultaneously. What they'd be paying for is the existing AOL customer base, which they'd then be able to migrate over to their service. (There are a number of ways this could be accomplished, but an "optimal" method might be creating a new "AOL 10" type CD that asks users if they'd prefer the "old AOL style" front-end, or just a direct connection to the Internet without it. This new CD could be modified to connect to MSN's existing phone numbers or gateways, allowing Microsoft to slowly phase out and sell off the hardware they obtained from the AOL purchase.)

As it stands, MSN competes pretty directly with AOL. (The "rest of us" don't generally consider either one a viable option for our internet needs.) If they absorb AOL, they might have enough customers to make it profitable.

Why did HP buy Compaq? Computers are far less profitable than printers and other such accessories. Why did HP want to further dilute its company with marginally profitable computers?

Perhaps the biggest reason was that it funnelled more customers to the more profitable accessories businesses (if I buy a computer from HP, I might as well buy the printer from there as well). Also, the economies of scale in their parts business (both HP and Compaq sell highly proprietary parts which are only available from

More likely, the update to AIM you install will magically turn it into MSN messenger (or at least make it work with the same protocols as MSN). I wouldn't mind so much, so long as I get to keep my old screen names, which probably isn't going to be feasable with so many people using both services.

Microsoft would probably keep the MSN and AOL seperate but equal. AOL would become a subsidiary of MSN and, if they're nice, they wouldn't change much, but all the money from AOL would go into Microsoft's pockets. They would have too many issues and would piss too many people off by merging them into one craptacular service.

We are talking a company that took 6 years to get rid of a setting in Outlook that automatically opened any file attachments. And you couldn't disable it.

And that's stupid? Not really. Just lazy. I doubt it cost them that much money, and you know what? Nothing else matters. At all. A company with bad software is not necessarily stupid, especially if they manage to sell that bad software as well as MS has.

And that $4.2 billion dollars has might as well be written off as entirely lost. Netscape Navigator is more or less a trivia entry in the browser wars, handing off the MS-fighting role to its child named Mozilla. Netscape's now mostly being used as a content portal...

Netscape could fold from the browser business and it wouldn't give a monopoly to Microsoft anymore.

That was an example of both a horrible purchase, and horrible brand management. The Netscape name is pretty worth nothing now, since there's really no live product, and just another stupid portal. Like other posters said, AOL is being run into the ground, and the Netscape acquisition is one stellar example of bad management.

Oh what a great couple that would make. I always knew there was something strange about this spring time...
On the other hand, this might also have its advantages. We wouldn't have to be anti MS AND anti AOL anymore because it would be just one thing or one enemy less.

Unfortunately, this makes excellent sense for Microsoft. When they put together MSN around 1994, it was obvious that they were trying to get in on this action. MSN never succeeded in terms of its weak user base.

Microsoft already has the cash on hand, and AOL Time Warner stock has dropped about 75% since the merger was completed.

This suggests that they're only trying to acquire AOL, not AOL Time Warner - so this wouldn't be the complete media content delivery yadda yadda that they want. However, AOL has a large subscriber base and serves as an awesome potential outlet for Microsoft's content.

Megacorporation TimeWarner (formerly AOL Timewarner) is eager to divest itself of the lagging AOL brand. This megamerger was a disaster for consumers (as all mergers are) as well as the interested parties, e.g., the capitalist shareholders.

Microsoft would make an equally odius partner to combine with AOL. Lie down with dogs, wake up with fleas...

This is typical Microsoft behavior. MSN has always been meant to be an AOL-killer, but despite having the Microsoft promotions machine behind it, they've never come close to defeating AOL. If you can't beat 'em, try to buy 'em.

One of AOL's greatest strengths at the moment is the fact that it has easy access to the TV, movie, music, and magazine content empire that is Time Warner. Microsoft just doesn't have as large of a content machine.

This is important because AOL's not really just an ISP anymore. Many people who have a fully functional ISP connection are still paying AOL just for it's boatload of exclusive content. AOL without the Time Warner content base would look something like MSN, and just not have as many members as it has now.

Any MS-AOL would need to license more content than it would have in house. AOL's worth more inside a media company than it is inside Microsoft, I can't see how this deal makes sense.

While AOL could make a good acquisition (and one wonders how a IE and Mozilla merge would end up) it's a lot to chew. Microsoft already functions like a group of individual companies, with each faction at best peripherally aware of the others, but the concept of adding AOL to their empire is a bit staggering not only from the consumer perspective but from the logistical as well.

I don't know what the profitability forecast is like for AOL, but surely Microsoft would do better to play up MSN than to sink t

I've done business with AOL for the past few years. Everytime I visit the AOL campus there is always talks of micro$oft buying them out. There were even talking about it when they merged with Time Warner. Stating that TW would spin off AOL for auction. Nothing really has changed much over the past few months to really push this deal through anytime soon.

Why not? They've already proven themselves immune to anti-trust concerns and netscape got the official ax a little bit back. AOL customers are already used to prorietary software and versions of their search and browse capabilities. They're used to prepackaged experiences and very high amounts of ISP marketing.

AOL is a black mark on Time Warner, and they would love to get rid of it. This would vastly increase MS penenatration in the broadband markets and they can expand their strict policies on what can get on the Internet. MS has the cash, AOL has the customers of the type they so desperately want. It's a marraige made in hell. I predict this goes through.

At this point Microsoft is only ever going to die the way the fat-man in the restaurant sketch in the Python's Meaning of Life, i.e. gluttony. I believe that the best thing that could of ever of happened to Microsoft, and every computer using consumer on the planet, would have been for them to split their OS division. But the way they are set-up now, one poison pill can make the entire organism sick. Knowing how AOL is run, the only reasonable course of action would be to shut it all down and switch them o

When we think of a rival for AOL, who do we think of mostly? MSN, of course. When AOL launched their prized High-Speed DSL service, who was next to follow and stayed right behind them? MSN. Now wouldn't you see some little "defeating competition" problem in there somewhere?

Just wait until we hear from the DOJ. If they wouldn't let Oracle purchase PeopleSoft, they sure as hell had not better let this happen.

In the better case, if they somehow do purchase it, it's pretty hard to say what would happen to

As Time Warner mulls what to do with its America Online division, the potential buyer on the minds of the company's executives is tech giant Microsoft, The Post has learned.

Time Warner executives have held discussions in recent months with Microsoft about a potential sale of AOL, The Post has learned.

In addition, Time Warner lawyers have begun analyzing any potential antitrust issues from such a deal, and to date their conclusion is that there would be few roadblocks to a Microsoft acquisition of AOL, acc

Even if they bought...err I mean negotiated their way through the SEC, and other federal government hurdles, they would still run into the EU.

When I formerly worked with Sprint, and MCI was trying to buy them, it was a God-send that it got blocked. It may prove to be the case here as well. We've already read stories on here about the EU not being Microsoft friendly.

In the end, would it benefit the consumer? I'd be inclined to say, "Maybe, but probably not". The only benefit to M$ shareholders is rolling in the monthly subscriber fees. However, they are from a fickle market: consumers. M$ gets their monthly royalties from a reliable, steady source: businesses. This is part of the reason Nextel kicks everyone's ass in terms of revenue per user (because they identified this marketing trend early and targeted it).

Miscrosoft may as well buy TW and have their massive content delivery system, which is one of the reasons MSN isn't doing well. After this can a merger with the Disney/McDonalds/Coca-Cola empire be close behind? McDonalds McWi-Fi or whatever is already "powered by centrino" whatever the hell that means, so they're already in bed with Wintel. This looks like the start of the sci-fi predicted super-corps that eventually replace the government. Blue Sun anyone? Where do i signup for the libertarian party...

Please people, stop speculating on what would happen if MS bought AOL-TW. The article is about TimeWarner selling its AOL portion to Microsoft. It does say that they are discussing MS possibly investing in TimeWarner as part of the deal though. But that is not quite the same a MS taking over the whole kit and kaboodle.

A lot of people have been bashing AOL, and it's true that it's probably not a good choice for most/. readers. But they have a lot of features that are good for some pretty big niche markets (people with small kids, for example).

I have a Time-Warner cable modem. Time-Warner has to let other ISPs use its cable lines, so when you sign up, you can take Time-Warner's Road-Runner, Earthlink, a local company, or AOL as your ISP.

If you walk into the cable company office, you see tons of promotional material for Road Runner. They have cartoon road runners on posters all over the place, terminals in the office so you can see how fast it is, and all the rest.

But there is no sign whatsoever that AOL is available. You have to know about it. I'm not even sure you can sign up for AOL at the office -- you might have to call AOL and get it set up.

Whether or not you like AOL, it's a big brand, and a lot of people do like it. I think that if they had posters for AOL at the office, along side of the Road Runner stuff, they'd sell as many AOL accounts as Road Runner accounts.

They don't, though. Why? Corporate infighting? Not wanting the other guys to look good? I don't know.

The point is that AOL is an asset that Time-Warner, for whatever reasons, doesn't want to maximize. Someone else would do a better job.

As of Sept 2003:
-America Online had 24.7 million subscribers and a 25.6% share
-MSN had 8.7 million subscribers and a 9.0% share.

So MSFT could buy the dialup business and hold a significantly larger share of the ISP business. 34.6% does not a monopoly make.

Take the content and Roadrunner and Cable. Combine it with Paul Allen's Comcast and you now have 45% of the ISP market and a significant portion of the cable TV market

Time Warner Roadrunner broadband never offered AOL as an ISP option. So I suspect that they do not think highly of AOL even within the walls. You can even get Earhlink or Max.Inter.Net as an alternative!

In other news, Microsoft today announced plans to acquire the government of the United States. By leveraging innovative technologies, content providers streamline compelling enterprise solutions.

A Microsoft spokenperson commented, "By controlling what is arguably the most powerful government in the world, Microsoft will be able to better control the rights of consumers in regards to the company's valuable intellectual property."
The first change to be made, according to Chairman and now Chief World Domination Officer Bill Gates, is to rename the IRS (Internal Revenue Service) to MRS (Microsoft Revenue Service). From now on, all tax dollars will go directly into Bill Gates' checking account.

Microsoft's acquisitions last week of the RIAA, MPAA, SCO, and the Equifax credit reporting bureau have empowered the company to supply the best operating system since Windows XP, enabling the multinational corporations next on Microsoft's acquisition list to gain a higher return on lawsuits against their own customers.

in the millions of man-hours needed to retool all known scales of, measures of, and references to 'corporate suckage'

admit it - the majority of/.ers reading the story headline had their face in the hands and were making some sort of noise that would make your dog cower, it's the synergy of the basic groans most make at the mere mention of either of these companies

the new grownup ms ads make me want to watch 'office space' to see more realistic cubicle behavior, and the kids ones make me imagine that kid never gets to astronaut school because he's doing his application in office...

on the other hand, the prospect of apple / pixar / disney being aligned could make people skip down the street...

This is idle speculation and it is completely unrealistic for all of the antitrust reasons.

1. AOL has the option to buy a large chunk on Google and Google is AOL's preferred search option. AOL promotes Google in their commercials.

It is no secret Microsoft wishes to bury Google with Longhorn.

2. AOL owns WinAmp.

Microsoft getting its grubby hands on WinAmp and other Nullsoft properties wouldn't be allowed. See the European Union's (non Mad Cow) beef with Microsoft and Windows Media Player.

3. AOL owns AIM and ICQ.

Microsoft acquiring either or both of these Instant Messenger platforms would not be permitted. AIM is essentially the standard IM client on mobile phones in America. AIM is also the basis for Apple's iChat software. There are too many parties involved that would object to this.

4. AOL has options to buy Amazon.com stock and owns shares.

'Nuff said.

5. AOL owns shares in TiVo and is a partner.

'Nuff said. See UltimateTV. Also see "WindowsXP Media Center."

6. AOL is an active partner in Sony's plans of offering IM services to the Playstation platform. While this has not happened on the PS2, it is most likely scheduled for the PS3.

Microsoft and the Xbox, not to mention the Xbox Next. 'Nuff said.

7. AOL is a preferred partner with Apple's iTunes.

Microsoft acquiring AOL will again be seen as a move to squeeze Apple out of the market just like over the AIM situation. This will only aide the antitrust lawsuit Real Networks has leveraged against Microsoft.

8. AOL was an institutional shareholder in Palm since the spin-off from 3Com.

Again, Microsoft acquiring AOL would be a headache because this would be yet another example of Microsoft hitting at its various competitors.

The Bush Justice Dept., already burned over the Antitrust Settlement, will in no way allow this to go through.

The current administration (neoconservetive/market fundamentalist/ultranationalist) attitude on monopolies and competition is; if they can find ANY relationship that can be twisted to sound like "competition", they'll use that. The ends justify the means, and if that means allowing US corporations to grow into monopolistic behemoths, then so be it. The end goal, of course, is to maintain economic dominance over European corporations, at all costs.

New MSN/AOL Verson 6.66
With the new MSN/AOL you now recive the dumbed down internet from the biggest computer software companys that is above the law.
You will be informed of updates though our Blue screen of udates. When you see the blue screen you need to update, no pop ups just a friendly blue screen to let you know that we care about you and there is a new patch ready.
Don't worry about spam because no one wants email you anyway. Your new buddy list will have all of you AOL/MSN friends and one spot and file shareing has never been easyer with our new "back door" file server.

Internet Explorer defaults out of the box to MSN. This makes Ma and Pa America think that MSN is the internet. There is no real competition for Inet services. I have a friend who thinks that Hotmail is internet mail, he refuses to believe me when I tell him his DSL account includes mail. He does not even understand that you can have mail with your own ISP, in his case telus.net! As long as Microsoft is allowed to abuse and confuse the consumer this rediculous situation will be the case.

If Microsoft acquires AOL/Time-Warner [cjr.org] and Comcast [cjr.org] acquires Disney [cjr.org], then Microsoft will effectively control the cable broadcasting and communications market.

The key to this deal is Microsoft's position as the largest single shareholder in Comcast owning 15% of the companies stock. Compare this to the Roberts family (Ralph Roberts, founder of Comcast, and Brian Roberts, CEO) holdings of slightly over 1% of the company.

If Comcast acquires Disney, then a voting policy dictating that the Roberts family shares are weighted in voting to = 7.5 votes per share while other shares are = to only around.85 votes per share will likely be determined to be unfair, as all shareholders that are brought along in the merger will have not been given opportunity for fair consideration of those terms.

Just think about the future that these two deals could bring us, Microsoft being in control of the vast majority of news, music and recording, movie, and print media in the United States while being capable of dictating the protocols that are used to connect to, and to filter the trafic to and from, the internet.

It's not a tin foil hat theory. It's simply the logical extension of such consolidation of communication and media marketplace under the control of one company that has a rather nasty history of not respecting the wishes of the community that they chose to do business in.

Oh yeah, Paul Allen's vompany Vulcan Northwest Inc. [cjr.org] owns a 5% share in Microsoft, so we can probably count Charter Cable and a number of other media and telecom companies as being involved in this as well.

But AOL has been deeply involved in Worldcom, as well as Microsoft with both of them.

Worldcom was also hugly overvalued, and way buying up company left and right, until the bubble burst when the MCI merger blew up.

The real question at hand is, when will the AOL bubble burst?

Or is there more to the Microsoft Worldcom AOL Triangle that will we find out when more people lose thier pension funds?

It is also a question, what is the real value of Microsoft? How much of it is hyperinflated, and what if it turns into another worldcom with cooked books full of accounting tricks. If it is anything like its partners, I would not be suprised if they were involved in such practices with them.

I wonder if the federal government is simply holding off on slapping MS with some serious anti-trust stuff (such as, say, federalizing them) until they've amassed enough of the wealth to turn the US into a much less free country.

No, not AOL TW, *just* AOL, therefore giving MS the huge online presence they've never been able to corner. (MSN, anyone? CRAP! I say) TW is looking to pare down to their core competencies, magazines and movies. They've recently sold off Warner Music, I believe, also.

And if this deal goes down, you can thank the millions of dollars thrown around in back rooms. I can't believe this would ever even be thought of by MS, but they've got some huge balls. The operating system monopoly with the Internet service provider monopoly? (I know there are other ways of getting on the Internet and so do you, but does Billy Ray and Sheila down in Podunk? Besides, 35 million subscribers is not a drop in the bucket, either) Sheesh.... Do you need any more proof that this is a Bad Idea (tm)?

I could be wrong, but I don't think they are talking about aquiring the entire AOL Time Warner. Any deal between MSFT and AOLTW would probably only involve a sale of the AOL division to Microsoft. It is no secret that Time Warner has been looking at ways to make the most of AOL while it still can. Selling it to Microsoft, would probably be a very good deal for TimeWarner.

On the other hand, I cannot see the deal being that great for Microsoft. AOL is a dying division in AOLTW, their core market is in dialup